> And guess what... all of this just makes it harder to put 20% down on a home, further exacerbating the cycle. Especially when you're in a bidding war and some

> And guess what... all of this just makes it harder to put 20% down on a home, further exacerbating the cycle. Especially when you're in a bidding war and someone is willing to outbid you because they're putting less money down (which is a terrible financial move, but one that happens all too frequently). Bidding wars are low key one of the biggest reasons people go into housing debt, they get caught up in a specific house and aren't willing to walk away regardless of how the finances have changed since they first looked. Having gone through a 'bidding war' twice purchasing my last two homes, I can say this not really the case as in the market dynamics you describe the appraisers can't keep up with market value and usually therefor those contingencies are waived as a prerequisite by sellers. This means the buyer needs to come up with cash for whatever difference between sale and banks appraisal price. This in turn results in deals falling through because people didn't have enough liquidity so now the seller requires proof of liquidity and actually prefer offers with bigger % down payment, even if the actual offer is lower. For the same reason all cash offers often get accepted over higher mortgage backed offers, just because there's less risk for the seller of the deal falling through. But yeah, to your last point, buying a house in any hot market sucks and comes with lots of challenges, the first of which is overcoming the absurd prices.